What Is Land Transfer Tax (LTT)?
A provincial tax paid by the buyer when a property changes hands. Rates and rules vary significantly by province. Ontario and BC have the highest rates.
Definition
Land Transfer Tax (LTT) is a one-time tax payable to the provincial government when you purchase real property. Almost all Canadian provinces levy some form of LTT, though the name, rates, and structure vary. Ontario and British Columbia have the most significant LTT burdens, with tiered rates that can reach 2.5% and 5% respectively on high-value properties. Quebec has a similar tax called the Welcome Tax (taxe de bienvenue). Alberta does not have a traditional LTT but charges land title transfer fees. Toronto buyers pay a municipal LTT on top of Ontario's provincial LTT. First-time buyers in Ontario and BC may qualify for partial or full rebates. LTT is a major closing cost, often running $10,000 to $30,000 or more on a typical home purchase.
Formula
Example
Ontario: buying a $700,000 home. LTT = 0.5% x $55,000 + 1% x $195,000 + 1.5% x $150,000 + 2% x $300,000 = $275 + $1,950 + $2,250 + $6,000 = $10,475. First-time buyer rebate of $4,000 reduces this to $6,475.